What Unemployment?

The unemployment rate should perhaps be the subject of a future Fun With Statistics post, as popular wisdom seems to believe that there are increasing millions of unemployed, while the actual rate is at near record lows. In fact, most economists believe we’re near the "full employment" level, where the roughly 4.5% rate is reflective of normal ongoing churn, the perpetually unemployable, and those who simply don’t want to be employed. And of course there are some of us that don’t want to be employed but have to contend with the real world.

Wisconsin is no different, and although it has been hard hit by the ongoing manufacturing tectonic shift, rates are still just a percent or so above the national average. Which means there’s considerable competition for workers among the manufacturers that have figured out how to thrive in a supposedly adverse environment. From the Milwaukee Journal-Sentinel,

Lots of manufacturers around Milwaukee complain they have a hard time hiring. They tell pollsters this. They fret about it. They hold cookouts on the front lawn, as Milwaukee’s Tramont Corp. did, trying to attract applicants. They recruit in poor neighborhoods and run training programs with tech schools, snapping up the grads at $14 an hour. It’s not just skilled jobs, says Mike Klonsinski, who heads the Wisconsin Manufacturing Extension Partnership. There are a lot of jobs for people without specialized skills, he says, and they’re vacant, too.

Sounds tough, eh? But they also have to battle popular perception.

People are baffled when they see neighborhoods with high unemployment while manufacturers, even those nearby, can’t find enough workers. Yet the mismatch is real, says Jim Paetsch, who tracks businesses’ needs for the non-profit Milwaukee Development Corp.

So what the heck is going on?

Rakow wonders whether many of those who remain unemployed are, largely, the unemployable. This seems improbable, given joblessness rates among the poor. "Part of it is even getting people to apply and getting people to show up and show up on time," says Klonsinski. Forget about knowing how to weld. A lot of factories are having a hard time finding people who simply know they have to arrive before the start of every shift. Some observers say it is employers’ unwillingness to hire ex-cons that derails the poor, but, says Rakow, "I’ve hired plenty of people who have felony convictions." He has to: Close to 40% of his applicants have a felony in their past.

But some companies are investing in training to tap into a previously "unemployable" segment.

Factories find it hard to get people with even the most basic of skills – simple math, the ability to communicate or to see how a task fits into a process. These are important as factories adopt methods, such as lean manufacturing, that put more responsibility in workers’ hands. Such techniques can keep a factory competitive. "None of this stuff is untrainable," says Paetsch – if employees actually go to work. Yet even that more basic prerequisite of knowing what it means to have a job – "soft skills," as they’re called – can’t be taken for granted.

Last time I checked it wasn’t the responsibility of employers to provide basic education, but I guess they have to when the current education system caters to the lowest common denominator… and as a result fails even that population. Although sometimes I’ve been made to wonder… such as when I tried for weeks to find employees that could pass a simple math test requiring the averaging of three integers. Tough to do. But one Friday when the payroll system created a complex mistake involving pre-tax accruals on part of 401k earnings, those same employees were very quick to identify and point out the problem. Quicker than the finance department, in fact.

However the investment in education, even basic education, is a good thing. Sure some employees will eventually take their new knowledge elsewhere, but those that stay will use their new knowledge to create more value for the organization.

So do you really have a problem finding employees? Or are you just not willing to invest in developing potential new employees?

Comments

I had the same problem in Detroit about 7 years ago, and in CT a few years before that.

In Detroit, one out of every four applicants had at least one felony conviction – not arrest, conviction – and some probably couldn’t tell me what one out of four is as a percentage.

In CT, one of our employees actually told our production manager that he needed a new ruler because his was “broken”. We measured widths down to a 64th of an inch. This piece of Samsonite couldn’t go past half-inches and couldn’t figure out what all those other lines were on his ruler.

As for basic education, let’s face it – parents will sue if little Johnny doesn’t pass. I know – it happened to me. I served on a Board of Education and you would be amazed at what parents expected out of the school system (and this was 20 years ago). There isn’t enough time in the day for reading, ‘riting, and ‘rithmetic when teachers are expected to be psuedo-parents, counselors, police officers, referees, babysitters, child welfare advocates, wet nurses, lunch aides, and everything else that we saddle them with today because parents fail at parenting.

I am very familiar with this situation both on the hiring end of a manufacturing facility and being married to a high school teacher. He and I have had more that one discussion on the very topic of “what does preparing students” mean in today’s schools.

I have the opportunity to work with some outstanding students that choose to supplement their high school studies with a program that focuses on manufacturing and engineering. However, out of 10+ school districts (and hundreds of students) that could use this program, they average around 15-20 new students per year. At least right now, the school districts see no incentive for encouraging their students to participate.

Our State Dept. of Ed is making some really ‘out-of-touch-with-reality’ requirements for the school districts to meet. And, unfortunately, with most of the kids I see coming out of high school, I wouldn’t hire them for fast food jobs, much less around manufacturing equipment.

Until our society’s viewpoint shifts from “I’m a victim that is owed something” to “I’m responsible for ALL my actions and the effects (or consequences of them)” I think the situation with the unemployement boggle will continue.

When exactly did it become the society norm to accept whiny victims, anyway?

“such as when I tried for weeks to find employees that could pass a simple math test requiring the averaging of three integers…But one Friday when the payroll system created a complex mistake involving pre-tax accruals on part of 401k earnings, those same employees were very quick to identify and point out the problem”..I’m confused. Are you saying the employees who figured out the accruals are ones you finally hired even though they couldn’t pass the averaging test?…or are they ones you found who finally *could* pass the test?